“They stole from me!” “I am not taking a penny less than the full amount owed!” “I want to nail that son of a b#@^$!” Often creditors engage an attorney to recover an amount owed from a debtor, and the creditor feels betrayed or wronged by the debtor. It doesn’t matter whether the account debtor is a long time customer who has ignored demands for payment or a one time credit sale; these feelings of animosity toward that individual or entity are still present. If not checked, these feelings can boil over and lead to unproductive or unnecessary litigation that only ends up costing the creditor more time and money.
As with any service industry, one of the first duties of a creditors’ rights or bankruptcy attorney is to monitor, deal with and ultimately manage client expectations and emotions. I would suggest that the first thing that needs to be done is to get your client in an “economical mindset.” A creditor needs to realize that when a debtor files bankruptcy or the creditor is forced to place an account with a law firm for collection, then the account is already a loss. For a creditor’s rights attorney the goal then becomes finding the best way to mitigate that loss and obtain the most favorable resolution for their client.
Therefore, every decision during the “recovery” process should be analyzed while taking full account of the economical consequences of that decision. No where is that more prevalent then when deciding whether or not to initiate litigation. Immediately filing a lawsuit without a preliminary asset search or investigation into the financial stability of your debtor can turn out to be the most counterproductive thing a creditor can do when trying to be made whole. Likewise continuing to pursue litigation when it is obvious that there is no financial recovery to be had can only hurt a creditor’s bottom line.
Sounds simple enough. Why do creditors continue to fall into these same pitfalls? Emotion. Creditors become too focused on “punishing” the debtor, and lose focus of the end goal. Money.
Luckily, the problems outlined above are easy to remedy. Creditors, heed your attorney’s advice and try to avoid focusing on the emotions involved in the dispute at hand. Attorneys, take control of the situation and make it clear to your client that pursuing certain avenues, while emotionally satisfying, will simply lead to the loss of more time and money.
I understand that sometimes a message needs to be sent, but for those creditors who seek truth and justice in a failed creditor/debtor relationship, I would suggest visiting a house of worship. It will be less expensive and they may have better luck.